Official Blog of the Institute of Local Government Studies, University of Birmingham

Huge Whitehall battle over mayoral powers, reveals Heseltine

There was no camouflage flak jacket, no ceremonial mace to brandish, no Downing Street front door through which theatrically to exit a ministerial career, but who needs props, if, like Michael (now Lord) Heseltine, you’re one of the great headline-makers of your political generation. He managed it again at last week’s University of Birmingham Mayoral Debate, and against the odds.

For a start, the event seemed set up more as a rally than a debate – bringing together “leaders and representatives from business, education, politics, and the community, to discuss the benefits that an elected mayor could bring to Birmingham”. Once Catherine Staite had set the scene and identified some of the key arguments , the views of the remaining speakers – Lords Heseltine and Adonis, and CBI Regional Director, Richard Butler, a late replacement for Petra Roth, elected mayor of Frankfurt, one of Birmingham’s partner cities – ranged, though not in order of speaker, from enthusiasm to evangelism.

Mayor Roth’s absence was unfortunate. By comparing her own experience – Mayor since 1995, and previously a member of the Hesse Land (state) parliament – with the varying powers and responsibilities, terms of office, election and recall provisions of Germany’s other major city mayors, she could have broadened the discussion and maybe even provided a headline or two. Instead, Patrick Wintour, Political Editor of The Guardian and Chair of the debate, looked to and was well served by Lord Heseltine, British politics’ answer to Sunset Boulevard’sretired silent-film star, Norma Desmond: “I’m still big; it’s the stages that got smaller”.

The prompt was a question from Councillor Sir Albert Bore, former Leader of Birmingham City Council, Leader of its now minority Labour Group, but here a mere member of the audience. One of Labour’s earliest and strongest mayoral supporters and an aspiring future candidate, Councillor Bore asked when Ministers were going to indicate explicitly the additional powers that could be transferred to cities voting for elected mayors in the May referendums: “The Government should come clean about what powers are on offer [to mayoral cites]. If they are no more than to a current council leader, they risk losing the referendums to a No vote”.

There was no imperative for Lord Heseltine to say anything of substance. He could have treated the question as rhetorical, or left it to the other panellists – but, of course, he couldn’t resist. He couldn’t, he confided conspiratorially, reveal too much, and indeed he didn’t. He said enough, though, to give Patrick Wintour his headline: “Whitehall battling to avoid losing power to mayors, says Heseltine” .

There was a “huge battle” among Ministers, Heseltine intimated, over how much extra power should be granted to elected mayors across almost all relevant functions: money raising, transport, welfare, strategic planning, and economic policy. Some ministers – and no doubt their civil servants – aren’t keen on transferring anything of significance. The Lib Dems further complicate an already dual-track policy deriving from different sections of the Localism Act. Pro-decentralisation, but anti-mayors, they want devolved powers for any city able to make a case, regardless of its form of governance. Cameron, according to Andrew Rawnsley in Sunday’s Observer, doesn’t want anything too radical, that could be attacked as yet another U-turn. Oh yes, and the theoretical enforcer, Greg Clark, Minister for Decentralisation and Cities – responsible for the ‘City Deals’ policy that is the chief source of grief for Councillor Bore and other mayoralists – isn’t even able to punch the weight of a full Cabinet member, let alone take on the PM.

City Deals were introduced in last December’s Cabinet Office prospectus, Unlocking Growth in Cities– . The Government would work with individual cities to achieve a series of genuine two-way negotiated agreements that would enable cities to do things their way. The prospectus accordingly set out an “illustrative menu of bold options” (pp.8-9) that Ministers would be willing to discuss as part of the deal-making process – greater freedoms to invest in growth, the power to drive infrastructure development, new tools to help people acquire skills and jobs. In return, where cities wished to take on significant new powers and funding, “they will need to demonstrate strong, visible and accountable leadership and effective decision-making structures” (p.2 – emphasis added) – this last clause being universally understood as code for having an elected mayor.

In addition, “other than as part of a city deal negotiation, the Government does not intend to reach any view about specific powers that might be devolved.” (para.10 – emphasis again added)

The logic is sound, and the localist intent probably sincere. A mayoral system and the mayor (or leader) personally will determine the details of any city deal; the system will be determined by the referendum; so the content of the eventual deal cannot be known, let alone announced, before the referendum. Councillor Bore’s point, however, is equally irrefutable: without knowledge of the nature of the deal, voters may lack the incentive to vote for a mayoral system in the first place.

So is there a way out of this closed circle, or ways of signalling to voters the kinds of powers an elected mayor could bring to their city? Perhaps. First, Whitehall hostilities notwithstanding, the Government could do – maybe in the March 21st Spring Budget – what many were hoping for in its January response to its mayoral consultation, What can a mayor do for your city?, and give some indication of what mayoral cities specifically might expect from its “illustrative menu”of city deal options.

Though not comprehensive – with no mention of additional sources of revenue funding, or of police and fire services, for example – it was a wide-ranging list, much too lengthy to be reproduced here. However, it included: a single consolidated capital pot, rather than multiple funding streams; access to an additional £1 billion Regional Growth Fund; new infrastructure funding through Tax Increment Financing; devolution of local transport major funding and responsibility for commissioning rail services; devolution of Homes & Communities Agency spending and functions; and the creation of City Apprenticeship Hubs and a City Skills Fund, enabling adult skills to be tailored to the needs of employers.

No matter how enticing the list, though, it doesn’t in itself answer Councillor Bore’s question. The closest we can get to that is the one mayoral city deal that has been negotiated and publicised so far – with Liverpool. The Labour Council are bypassing the referendum process and moving straight to the election of a mayor in May, and have negotiated a deal that the Leader, Joe Anderson, hitherto a critic of a purely city mayor, feels is something both to shout about and campaign on.

The key elements of the Liverpool deal comprise:

A new Environmental Technology Zone, with the resulting growth in business rate income going to the LEP and five priority economic development areas (Mayoral Development Zones), and the Government prepared to add a further £75 million for economic development backed by a strong business case;

A Mayoral Investment Board to oversee the city’s economic and housing strategy, pooling Home & Communities Agency and other local land assets to drive economic growth;

Welfare Pilots, developed in collaboration with the Department for Work & Pensions, to deliver a programme of support for young people leaving the Work Programme, and a ‘Youth Contract’ pathfinder;

A Secondary School Investment Plan to build 12 new secondary schools, to help support the local economy and skills agenda.

The total package, according to the Council’s report, could bring the city close to £1 billion. Multiplying up for Birmingham, with more than double Liverpool’s population, gives a number that will surely strike most people as rather more than “a few crumbs from the Westminster table” – to quote Lord Digby Jones’ recent dismissal of the value of a city mayor (Birmingham Post, March 1). Obviously, it would help mayoral campaigners and voters alike, if Ministers were prepared to support the policy they are pushing on cities with something more explicit and authoritative, but even now we have a lot more material to work with than just a few months ago.

Chris is a Visiting Lecturer at INLOGOV interested in the politics of local government; local elections, electoral reform and electoral behaviour; party politics; political leadership and management; member-officer relations; central-local relations; use of consumer and opinion research in local government; the modernisation agenda and the implementation of executive local government.